OECD reports on Mexico’s telecoms reform

Mexico’s 2013 telecom reform has brought benefits, spurring competition that has increased access and brought down mobile internet costs from among the highest in advanced economies to among the lowest, according to the OECD Telecommunication and Broadcasting Review of Mexico 2017.

“Mexico should now consolidate this overhaul of telecoms and broadcasting so that households, businesses and the economy can reap maximum benefits from the digital transformation.” The review credits the legal and regulatory reform with helping create an environment for price reductions of up to 75% in mobile broadband packages, better quality services and the addition of 50 million mobile broadband subscriptions – more than the population of Colombia.

The telecoms and broadcasting sectors have grown faster than the broader economy since the overhaul. Mexico has fully implemented 28 out of 31 recommendations set out in the OECD’s 2012 Review of Telecommunication Policy and Regulation in Mexico, whose advice fed into the reform, and has partially implemented the other three. “Mexico should now make further modifications to policy, regulation and the legal framework to keep increasing competition, choice and quality, ensure optimal market conditions and provide incentives for operators to expand services and innovate.

It is important to ensure the Federal Communications Institute maintains the independence and powers to meet its mandate.” Adds Gabriela Ramos, OECD chief of staff: “Before this reform many Mexicans struggled to pay for long distance calls to relatives and could not afford mobile internet services that other countries took for granted. Three quarters of households had no internet access. Today, communication services are much more affordable and millions more people are online.”

Progress has been slower in broadcasting, where limited competition and restrictions on foreign investment are factors behind a 5% rise in pay TV prices over 2013–16. While the permitted threshold for foreign ownership in broadcasters has been raised from 0% to 49%, eliminating the restriction altogether would promote competition and better services, as would taking advantage of convergence over digital networks to promote further competition. http://bit.ly/2xWWZpK